KUALA LUMPUR (Feb 28): CIMB Group Holdings Bhd recorded a net profit of RM4.56 billion for its financial year ended Dec 31, 2019 (FY19), 18.3% lower than RM5.58 billion a year ago despite higher revenue, mainly because the group had incurred one-off transformational costs that amounted to RM643 million in FY19.
Aside from that, the group's FY18 earnings were lifted by one-off disposal gains from the partial sale of CIMB-Principal Asset Management and CIMB-Principal Islamic Asset Management, its stock exchange filing today showed.
Excluding these one-off items, CIMB said its underlying performance in FY19 remained strong, with a profit before tax of RM6.62 billion, representing a 5.5% year-on-year (y-o-y) growth from RM6.27 billion, as operating income grew 8.2% to RM17.8 billion from RM16.45 billion, underpinned by growth in net interest income (NII) and non-interest income (NOII).
In particular, it said NII grew 6.3% y-o-y to RM12.66 billion from a 6.7% loan growth, while the 12.9% improvement in NOII to RM5.14 billion came largely on the back of improved capital market activities. Net interest margin, meanwhile, was relatively flat at 2.46% versus FY18's 2.50%, with some spread compression seen in Malaysia and Thailand that was partially offset by improvements in Indonesia.
The year ended with a fourth quarter (4QFY19) net profit of RM848.64 million, versus RM1.12 billion a year ago, while revenue climbed to RM4.52 billion from RM4.07 billion.
CIMB declared a second interim dividend of 12 sen per share, pushing FY19 dividend payout to 26 sen or RM2.55 billion, translating to a dividend payout ratio of 55.9% of FY19 net profits, versus FY18's 25 sen or 42.4%.
In a separate statement, the banking group's chief executive officer Tengku Datuk Seri Zafrul Aziz said FY19's performance came in within the group's expectations amid numerous macro challenges.
Zafrul said he is happy to see that investments under the group-wide programme Forward23 are beginning to bear fruit, and that its underlying operating income has shown robust growth, underpinned by respectable loan growth in Malaysia, Singapore and Thailand.
"Commercial banking in particular, posted a strong performance, with PBT up 87%, driven partly by its double-digit business loan growth of 12.9% in Malaysia. I am also happy to note that for Malaysia, we are on track in disbursing our RM15-billion allocation to SMEs, and in assisting the B40 through our RM12-billion allocation for financing and related products," he said.
The year 2020, said Zafrul, will be a year of continued investment in the group's people and technology, to ensure its resilience in an increasingly challenging operating landscape.
"Moving forward, we remain vigilant given the macroeconomic headwinds, coupled with uncertainties due to the Covid-19 virus. However, we remain cautiously optimistic that in 2H20 (second half of 2020), the Malaysian economy in particular, will improve from the recently announced stimulus package and other private sector initiatives,” he added.
Shares of CIMB closed 4 sen lower at RM4.82 today, with a market capitalisation of RM47.829 billion.